Mizuho hosted a battery industry call looking at critical challenges, ramps, new technologies, and the longer-term outlook. It listed the key takeaways in a note titled "Battery Takeaways: Tesla the Leader, LFP Cost-Effective, Solid State Too Far Away."
Firstly, Tesla, Inc's TSLA Cylindrical Cell and 4680 drive sustainable battery technology, output at scale leadership versus the next closest Ultium.
Secondly, LFP is ~20% less expensive than NMC with lower systems cost and complexity but lower energy capacity; overall, a draw to reduce EV costs and China with less system complexity.
Thirdly, solid-state batteries were unlikely until 2028-29, with crucial issues near-term. Fourthly higher lithium pricing drives EV pricing as battery OEMs index to RMI driving ~60% higher battery prices; China's battery capacity will remain >50%.
In another note titled "TSLA-RIVN-NIO - Adjust EV Outlook for China Disruption, 2H REBOUND - Lower Ests/PT," Mizuho conservatively lowered JunQ/2H EV unit delivery estimates for TSLA, Rivian Automotive, Inc RIVN, and NIO Inc NIO, given Shanghai shutdowns and supply chain constraints.
Mizuho saw strong EV demand despite higher prices, with longer lead times, as production and new models ramp. Despite elevated macro risks, BEV could see strong 2H ramps as China reopens and demand improves.
Mizuho saw TSLA continuing to be a leader in the EV market with improving battery technology, a strong ADAS/AD roadmap, and an emerging player in energy storage. It rated TSLA a Buy and slashed the price target from $1,300 to $1,150.
Mizuho saw RIVN as a pure-play and strong early mover in the EV market, focusing on the higher-growth SUV and light truck market and a robust commercial vehicle roadmap beginning with Amazon.com Inc AMZN.
Rivian is also poised to benefit from improving costs with scale and a well-laid-out path towards further vertical integration giving more control to the production and delivery of vehicles. It rated RIVN a Buy and cut the PT from $80 to $70.
Mizuho saw NIO's value leadership in the premium EV segment with solid battery technology and ADAS roadmaps as growth drivers. It rated NIO a Buy and lowered the PT from $55 to $48.
Its core business, focused on domestic China, is another advantage with regulatory support and market familiarity. Global expansion is in the works and saw it become a meaningful contributor to future growth.
Price Action: TSLA shares traded lower by 0.85% at $730.86 on the last check Monday. NIO shares traded lower by 4.65% at $22.96, and RIVN shares traded lower by 3.53% at $28.46.
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